HSBC is reportedly reviewing a lucrative perk that covers private school fees for its bankers in Hong Kong, as part of a sweeping overhaul under Chief Executive Georges Elhedery. Europe's largest bank is considering whether to eliminate the benefit for new employees or adjust total compensation, according to Bloomberg News, though no final decisions have been made.
The subsidy, which covers 95% of annual school fees up to HK$220,000 (£20,700) per child in primary school and HK$300,000 per child in secondary school, is available to hundreds of mid- and top-level staff in Hong Kong—HSBC's biggest market. The perk costs the lender tens of millions of dollars annually and is not offered in its other global hubs, reportedly causing tension at its London headquarters. It is also not available to employees of Hang Seng Bank, which HSBC fully acquired in January for £10 billion and delisted from the local stock exchange.
International school fees are a significant expense for families in Hong Kong, and costs have risen since the COVID-19 pandemic. Hong Kong's largest international school group, the English Schools Foundation, plans to raise tuition fees by an average of 4.1% for most primary and secondary schools in the next academic year, translating to an increase of HK$600 to HK$720 per month.
Elhedery, who took the helm in 2024, has embarked on a major shake-up of the banking group, including aggressive cost-cutting, exiting certain markets, and separating operations into eastern and western divisions. This move briefly sparked rumors of an HSBC break-up, which were later dismissed. In a recent interview with Bloomberg Television, Elhedery stated he was "ruthless about killing complexity" in his push to make the lender simpler and more agile.
HSBC generates most of its profits in Hong Kong and China and is doubling down on Asia with the acquisition of Hang Seng. It has reportedly been pushing Hang Seng to shed bad debts linked to the property market. HSBC, founded in 1865 as the Hongkong and Shanghai Banking Corporation Ltd by Thomas Sutherland, is the largest bank in Hong Kong and one of three note-printing lenders. It opened a London office the same year, aiming to finance trade between Europe and Asia.
HSBC has been contacted for comment.
